Everyone knows companies have to become more innovative, but how? Most people have no idea how to be creative on demand, and brainstorming, management’s go-to tool of the past 50 years, is aging fast. A Google search for the phrase “Brainstorming is broken” yields 25,000 results.

But what if brainstorming could be made to work?

At an exclusive training session last week in Toronto, a dozen young entrepreneurs learned a new way of brainstorming derived from “design thinking,” which purports to put human experience at the centre of all activity. After watching these entrepreneurs up their game in just a few hours, I believe this approach can make your next brainstorming session a winner.

The entrepreneurs in this session were winners of the Spin Master Innovation Program, a contest that seeks out Canada’s most innovative startups. Co-founded by Toronto toy company Spin Master Ltd. and the Canadian Youth Business Foundation, the program gives each winning business $50,000 in financing (repayable), a custom mentorship program, and a two-day bootcamp. Day 2 was spent learning customer-centered brainstorming from Deloitte innovation coach Fei Yu.

Yu started the day by noting that design thinking isn’t about pretty pictures: it’s a different way of thinking, based on customer needs. Traditional thinking, she says, might ask: “What can we sell to customers?” Design thinking would ask: “What job does our customer need to accomplish?” Breaking out of fixed mindsets is the first step to surfacing new ideas.

The “Design Thinker” system taught by Yu was created by IDEO, a Palo Alto, Calif. design firm known for designing the Apple III and Apple’s first computer mouse. It differs from older brainstorming techniques by employing design tools such as storytelling, prototyping and experimenting to test good ideas sooner.

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Yu asked us to solve the following problem: Just 40% of homeowners in the fictitious town of Los Verdes recycle; Mayor Johnson is looking for ways to raise that participation rate. Divided into five teams, the young entrepreneurs are eager to begin, but Yu slows us down. The first step, she says, is to “Define the Challenge.” Should we be trying to boost the participation rate to 50%? Or to increase all sustainable behaviours among the citizens of Los Verdes?

Yu suggests the second approach. Innovation is about putting tasks into larger contexts, she says; this creates scope for creativity. Besides, you often find your answer one level up from the problem you’re trying to solve.

The next step in design-influenced innovation is observation. To reduce bias, you must learn how real users behave when they want to solve the problem you’re trying to help with. Often this means following people to their homes and offices. Yu handed out two booklets showing “a day in the life” of Jennifer, a dedicated environmentalist, and Chris, a self-absorbed non-recycler. Participants chewed over this data for insights: Why does Jennifer drive to work? Why does Chris recycle paper but not pop cans? Yu had us rate each insight based on three criteria: How Authentic is it? How Non-Obvious? How Revealing?

Now the real brainstorming began. IDEO’s ground rules: Encourage wild ideas; defer judgment; stay focused on the topic; be visual; go for quantity — set a goal for the number of ideas you hope to generate, and then surpass it. “The best way to have a good idea is to have lots of ideas,” Yu, quoted U.S. scientist Linus Pauling.

After capturing 150 ideas on sticky notes, Yu asked us to select the best. Her criteria: Which ideas are the most inspirational? Which are the most “connected” to the problem? Which are most relevant to the original challenge? Each group picked a favourite idea.

But what to do with ideas once you have them? This is where brainstorming usually fails. Design Thinker pushes practitioners to develop cheap, quick ways to test their ideas. Yu asked each group to devise an experiment that can be conducted in a day for less than $100. It’s a classic design trope: constraints help us get things done.

Yu gave each team 90 seconds to present its experiment. To help them communicate, she taught them to use storyboards — a classic device in advertising where you use rough sketches to convey complex ideas. Each team would prepare a four-frame storyboard to depict the problem, solution, and how it would work.

We found communicating through pictures is a key filter for enhancing our ideas. Even childlike scrawls with stick people proved powerful tools for conveying complex details. They also make it easier for everyone to remember each solution later when the ideas are discussed and voted on.

In the end, everyone won. The entrepreneurs formed back into company groups to use these techniques to solve a challenge in their own businesses. I was surprised how fast they embraced their new tools. And I could see how drawing the solutions helped turn new ideas into concrete tasks.

Montreal-based Miriam Groom will use her new insights to target a new test market for her service connecting Canadian employers with skilled workers overseas. George Phu of Mississauga, Ont., developed a new pricing model for his event-planning service, GrandezVous.

Then there were the three co-founders of Immune Biosolutions, a producer of antibody products from Sherbooke, Que. “We’re scientists,” insisted president Frédéric Leduc. “We’re used to learning by observation, being objective, and testing hypotheses.” Whether you side with science or design, it’s great to know there are better ways to innovate.

]]>http://business.financialpost.com/entrepreneur/make-your-brainstorming-better-with-this-technique/feed/0stdbrainThird crop of young entrepreneurs about to graduate from Spin Master Uhttp://business.financialpost.com/entrepreneur/fp-startups/third-crop-of-young-entrepreneurs-about-to-graduate-from-spin-master-u
http://business.financialpost.com/entrepreneur/fp-startups/third-crop-of-young-entrepreneurs-about-to-graduate-from-spin-master-u#commentsTue, 28 May 2013 23:00:20 +0000http://business.financialpost.com/?p=327085

Sean Sylvestre is speaking a mile a minute, showing no sign of slowing down despite a nagging cold.

Sitting in Spin Master Ltd.’s Front Street headquarters, the budding 32-year-old entrepreneur from Winnipeg is sharing nascent marketing strategies he is testing out to increase brand awareness of his technological startup Eyewear Evolution in the optical and eye care industry.

This coaching exchange is typical of Spin Master and the Canadian Youth Business Foundation’s (CYBF) Innovation Fund recipients, between ages of 18 and 39. For the third year running, the program selects up to 10 innovative startups across Canada that have strong commercial potential, to receive $50,000 in financing, mentoring with CYBF staff and Spin Master’s top executives, and a paid two-day trip to the toy company’s Toronto office for the “Innovation Launch Pad Workshop.”

The five startups selected last September had access to Spin Master executives from various departments — from sales and operations to finance, marketing, and management.

Jeff Hurst, Spin Master’s vice-president of sales and marketing, said the selection panel seeks to handpick applicants who show promise in character, rather than collateral.

“We are all learning on how we can co-ordinate our efforts and collaborate to really connect [the entrepreneurs] to where they need support, guidance, and advice,” said Mr. Hurst.

Spin Master is the Canadian success story of co-CEOs and founders Ronnen Harary and Anton Rabie, and executive vice-president Ben Varadi, three graduates of London, Ont.’s Western University who launched North America’s third-largest toy company on $10,000 in startup capital in 1994.

“Three young guys had a vision and a dream, and they made it happen. The spirit of the company has remained entrepreneurship,” Mr. Hurst said.

He said the Spin Master Innovation Fund is the founders’ way of giving back to a community that nurtured them for the past 19 years to become a global children’s entertainment brand with products such as Air Hogs, Tech Deck, and Bakugan.

“[Harary, Rabie, and Varadi] had a lot of help along the way and they want to provide that to young entrepreneurs in their shoes today. If they didn’t get that support, we wouldn’t be standing in Spin Master’s headquarters today,” Mr. Hurst said.

Visionaries and dreamers aside, he said the traits the selection panel sniffs out are pure passion and a risk-taking spirit.

Jenviev Azzolin, 29, and Denzil D’Sa, 39, of Montreal share that spirit, quitting their cushy Bombardier jobs in 2011 to “disrupt the mobile world” with their “virtual smartphone” concept called pplconnect, which allows digital users to access mobile content from any web-enabled device, irrelevant of operating system, hardware, and platform.

“We had a great idea team, with no money. We just quit our real jobs. What the heck do we do?” Mr. D’Sa recalled about their unemployed dark days.

The pair was advised to travel to the United States to launch their virtual smartphone to secure seed funding.

Mr. D’Sa and Ms. Azzolin raised $800,000 without traversing down the venture capital or private equity route, instead relying on the Innovation Fund, a grant from the Quebec finance ministry and the Canada Media Fund, among others.

The $50,000 loan has enabled entrepreneurs such as Domo Tea’s Anne Forkutza, who was a 2011 recipient, to grow her powdered organic tea business.

The Vancouver-based independent business owner increased the profit margin of her products through mentoring from CYBF and Spin Master and signed a deal with Horizon Distributors, one of the leading natural food distributors in Western Canada to multiply her products’ shelf space to 161 from 35 locations.

Nearly three in four small business owners are expected to retire in the next decade, with 41% retiring within five years, CYBF said. That will drastically change Canada’s cautious investing market wary of new blood, Ms. Azzolin and Mr. D’Sa agreed.

“There is a gap for new, young Canadian companies and entrepreneurs to come up and dominate,” Mr. D’Sa said.

In FP Tech Desk’s Startup Roundup series, we take a look at Canadian startup news from the past week.

Scan this: New mobile app from Wave tracks receipts so you don’t have to

Those tired of juggling myriad scraps of receipts and purchase records got a handy reprieve this week from the drudgery of accounting, thanks to a new, free mobile app from Wave designed to scan, store and track receipts.

Receipts by Wave uses optical character recognition (OCR) to extract relevant information from photographed receipts, which is then “streamed into Wave’s ecosystem of small business tools, where it creates an accounting record that is categorized and matched against existing transactions.”

The cloud-based provider of small business tolls is launching first on iPhone, with an Android app to follow soon.

Newsana launches online network for like-minded news junkies

Launched on Tuesday, Toronto-based Newsana is combining some of the best parts of Reddit, Digg, Google Reader and Twitter into a new, invite-only social news community, made up entirely of “informed, clever and genuine news junkies who are dedicated to sharing information and shaping the ultimate online news experience.”

Users can join up to five categories – which include business, arts and entertainment, lifestyle, media, politics, technology and world issues – and submit links to news stories found online. Quality content can be voted up or down and discussed in greater detail, allowing the community to act as a filter, or determine what stories are “truly essential” and worthy of making it to Newsana’s front page.

Co-founders Ben Peterson and Jonathan Wong hope this “handpicked” approach to news will help drive meaningful, focused discussions, and cut through the noise of online news. New users can request an invite now, or be invited by an existing member.

500px prepares revamped portfolio pages for the limelight

Toronto photography startup and popular Flickr alternative 500px announced a rebuilt version of its professional photo portfolios product, which will be released in early May. The team hopes the redesign will become “the industry standard for creating and showcasing professional-grade online Portfolios” by allowing photographers to design fully customizable personal websites that can be used to showcase and sell photos uploaded to their 500px accounts.

The new portfolio feature replaces a previous, more limited version that was released in 2010.

As a result, the price of 500px’s paid memberships will increase too – from $20 to $25/year for a Plus account, and from $50 to $75 for the service’s Awesome tier. Current users can, however, lock in at the old pricing tiers by purchasing or renewing either plan before May 1.

More from FP Startups this week…

• Toronto toymaker Spin Master Ltd. is teaming up with the Canadian Youth Business Foundation (CYBF) to launch its third Spin Master Innovation Fund (SIMF), promising up to $50,000 in financing for 10 “innovative startups” with strong commercial potential in either Canada or abroad.

• San Francisco venture capital firm Azure Capital Partnersis opening its first Canadian office in Calgary this month for investments in early stage IT and Internet startups from across the country. With over $750-million under management, the fund will explore potential Series A investments in the Calgary startup community, as well as in established hubs in Montreal, Toronto, Vancouver, Waterloo and more.

• Kik Interactive, the Waterloo, Ont.-based maker of the popular smartphone messaging app Kik, announced that more than 50 million users worldwide have now joined its cross-platform chat network. The company said Thursday it is also laying the groundwork for a new developer platform that builds upon its Kik Cards product — a set of lightweight web apps, such as games, that can be sent, received and opened within conversations — unveiled in November of last year.

Toronto toymaker Spin Master Ltd. is teaming up with the Canadian Youth Business Foundation (CYBF) to launch its third Spin Master Innovation Fund (SIMF), promising up to $50,000 in financing for 10 “innovative startups” with strong commercial potential in either Canada or abroad.

The fund is open to 18-39 year olds who can apply on CYBF’s website before May 21, 2013.

Tessa Mintz, vice president of volunteers and programs at CYBF, said in a press release that the goal of the fund is to further “the spirit of Canadian innovation by identifying highly driven young people and enabling them to become the future job creators who will strengthen and grow the Canadian economy for years to come.”

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Successful applicants will be matched with a CYBF mentor for two years, given access to CYBF resources, and awarded a paid trip to Spin Master’s offices for a two-day “Innovation Launch Pad Workshop” where senior executives will be in attendance.

“The Fund provided us with the most intense learning I have ever experienced as an entrepreneur and the essential financing we needed,” said Awane Moufide Jones, founder and CEO of Merchlar, a Montréal-based digital marketing agency.

Mr. Jones received Spin Master funding in 2011, and recommended the program to those “who want a program that thinks outside of the box and places real value on real world education.”

In the business of selling to kids, the companies that make toys and those that make video games and apps typically frolic in very different playgrounds.

But Spin Master Ltd., which has carved out a successful path through innovative partnerships and acquisitions over the years while the traditional toy market was under siege from tech toys, has decided to join the gaming ranks with a slew of new digital properties that will debut in 2013.

“The company is transforming itself and setting itself up for its next phase,” said Anton Rabie, co-CEO and co-founder of the Toronto company. “We have been saying as a company for the last 10 years that we are not a toy company; we are a children’s entertainment company focused on creating great content platforms for kids.”

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The shift comes six months after Spin Master made the strategic decision to pull its erstwhile hit toy Bakugan off the shelves in North America.

In between year-end planning meetings at Spin Master’s downtown headquarters, Mr. Rabie confirmed that the maker of toy classics such as Aqua Doodle and Redekai had just given the go-ahead to develop four digital gaming apps that will debut in the second half of 2013. The apps are based on its Air Hogs, Tech Deck and Spy Gear toys, as well as one for a new toy that will also tie in to a game and entertainment franchise.

“I do not want to say that the way kids play has changed, but things have broadened — there are more outlets in which they can play,” he said. “We want to be the company that recognizes where kids want to be.”

The fourth quarter is crunch time for toymakers around the world, and typically accounts for about 70% of annual sales at Spin Master, so deciding earlier this year to take Bakugan, one of the top-selling toys of 2008 and 2009, out of circulation “was one of the toughest meetings we have had,” Mr. Rabie admitted.

But creating demand for an item by putting a moratorium on it or making it available to consumers in only limited quantities — a marketing concept known as the scarcity principle — made good sense for Bakugan, he said.

“The choice was to keep Bakugan around in North America selling at $20-30-million, or to shut it down completely and then try to do $250-million a year again [on a re-release], which is what we did at the peak in North America,” a peak that took the company to close to $1-billion in yearly sales. “The business case suggests you should take it completely out of the marketplace and introduce it later to a whole new set of kids.”

Spin Master’s sales this year “will be lower,” Mr. Rabie said. The company, which has offices in Toronto, Los Angeles, London, Paris, Hong Kong, Mexico, Munich, Italy and Spain, scaled back a year ago, cutting an estimated 10% of its global workforce.

The scarcity principle can work well if toymakers are disciplined about it. One of the most-hyped toys this Christmas is Hasbro Inc.’s higher-tech resurrection of Furby, a late ‘90s-era talking stuffed creature, noted Gerrick Johnson, a toy industry analyst at Bank of Montreal.

For years Walt Disney Studio’s home entertainment division has followed the same principle for all of its new and classic animated movies, putting its video and digital releases in the “vault” and not selling them to consumers for several years at a time to preserve their monetary value. When they are eventually released from the vault, sales for the videos and Disney’s related toy sales spike as they gain the interest of a new generation.

Not all toys catch on with the next generation of kids upon re-release, Mr. Johnson said, but cyclical sales are typical for even the most enduring of toy brands.

“Lego has been on a hot streak for about five years now, and that is usually as long as a hit product cycle lasts. If they hadn’t gotten into the girls market [last January], we might be talking about their sales this year not showing much significant growth.”

Spin Master’s move into gaming comes more than a decade into a market-share assault on traditional toys by video games such as Guitar Hero and online and app-based franchises including Angry Birds and Minecraft. In the Bakugan era, the company was ranked the fourth-largest toy company in North America, and is now an estimated seventh behind Mattel, Hasbro, Lego, MGA Entertainment, Bandai and Tomy, Mr. Johnson said.

“Toy sales used to grow really robustly until 2000, 2001 and that is when we entered the first mega video game cycles with PS2, Xbox, and then Wii a few years later,” he said. “Then you moved on to iPhones and iPads, so digital entertainment really starting at the turn of the century has really taken a bite out of the toy industry’s growth.”

Ten-year growth in North American toys has been flat, according to market research firm NPD Group, with sales of US$21.2-billion at retail last year compared with US$21.3-billion in 2002. Mr. Johnson predicts toy sales this year will fall 2%, adding the key to toy growth now lies in the international market, worth some $80-billion and growing quickly in emerging markets such as India.

While video games have faced a recent overall slump, sales in North America grew to about US$16.5-billion last year from US$9.4-billion in 2001.

Spin Master’s transformation into a kids entertainment company has been gradual, befitting perhaps of an enterprise whose first toy in 1994 was as un-technological as you could imagine: the Earth Buddy, a length of panty hose filled with sawdust and grass seed and shaped to resemble a head, which grew grass “hair” when watered.

Since then, it has diversified into a multimedia giant, starting its own entertainment division in 2008 to create TV shows and forging partnerships with some of the world’s biggest entertainment and video game brands, including Nickelodeon, Disney and Sega Toys.

To spur its growth in gaming, eight months ago Spin Master hired Tim May. The former vice-president of production at California-based video game maker Activision, a previous partner on a Bakugan video game, is leading a digital development team from Spin Master’s L.A. office to develop games and apps for the company, Mr. Rabie said.

“Two new shows are in production to be on air in 2013,” he added. “Toys, shows and apps will now all go hand-in-hand.”

The company still intends to follow a strategy of developing new toys with inventors acquiring traditional toy brands. Last month it acquired the Spy Gear toy franchise and the Hyper Dash game from San Francisco-based Wild Planet, and is in talks with eight other parties for further game acquisitions, Mr. Rabie said.